Long Play Updates
Aracruz Celulose - ARA - cls: 59.65 chg: -0.55 stop: 57.99
ARA continued to slide on Wednesday but shares pared their gains with a decent rebound from its lows late in the session. Unfortunately, if you study the chart today's session almost looks like a failed rally under $60.00 and its 10-dma, which would be bearish. We would wait for a new rally over $61.00 before considering new positions. Our target is the $68.00-70.00 range. More conservative traders may want to exit near $66.00.
Picked on June 03 at $62.00
Business Objects - BOBJ - cls: 39.73 chg: -0.58 stop: 39.45
Warning! This looks like a new sell signal in BOBJ. The stock broke down and closed under the $40.00 level. Volume was light but the technicals indicators are definitely turning bearish. We're not suggesting new positions. More conservative traders will want to strongly consider an early exit right here. Odds are very high that BOBJ will hit our stop loss at $39.45 tomorrow.
Picked on May 21 at $40.15
CIT Group - CIT - close: 60.24 change: -0.89 stop: 58.49
CIT slipped sharply at the open but managed to recover back above the $60.00 level. We want to wait for a rally past the February 2007 high so we're suggesting a trigger to go long the stock at $61.75. If triggered we are aiming for the $67.00-70.00 range. Currently the Point & Figure chart forecasts an $84 target. More conservative traders may want to exit near $65.00, which could be round-number resistance.
Picked on June xx at $xx.xx <-- see TRIGGER
EMC Corp. - EMC - close: 16.93 change: -0.07 stop: 15.85
EMC actually held up relatively well today. The stock churned sideways and tried to rally late this afternoon. We are concerned given the market's weakness and if EMC does see any profit taking then we can look for short-term support near the rising 10-dma (around 16.68). We're not suggesting new positions at this time. The P&F chart has seen its bullish price target rise from $24.00 to $25.50 over the last week. Our target is the $18.50-20.00 range.
Picked on May 27 at $16.46
Fomento Economico - FMX - cls: 39.26 chg: -0.94 stop: 37.99
FMX slipped under round-number, psychological support at the $40.00 level today. A bounce near $39.00 or the $38.00 level could be used as a new bullish entry point. However, we'll start to grow concerned if FMX trades under $39.00. We would definitely wait for signs of a bounce before initiating new positions. More conservative traders may want to raise their stop toward $39.00. Our target is the $44.00-45.00 range.
Picked on June 03 at $40.44
Gerdau Ameristeel - GNA - cls: 15.73 chg: -0.43 stop: 15.23
GNA slipped 2.6% and closed under technical support at its 10-dma. The stock is very overbought and if the markets see further selling then GNA would be an easy target for investors to just sell first and ask questions later. More conservative traders might want to tighten their stops. Our target is the $17.50-18.00 range. This remains a higher-risk, speculative play. Some of the technical indicators are suggesting the next move "should" be down.
Picked on May 20 at $15.23
Kansas City Southern - KSU - cls: 41.39 chg: -0.66 stop: 39.61
The railroad sector was one of the worst performing groups today. Bearish comments about freight volumes from a Norfolk Southern executive undermined the sector. The DJUSRR railroad index declined 2.3%. Shares of KSU fell 1.5% but managed to hold the $41.00 level, which is short-term support. Our target is the $43.50-44.00 range. Currently the P&F chart points to a $45 target.
Picked on May 17 at $39.61
Pinnacle Enter. - PNK - cls: 30.06 chg: -0.70 stop: 29.95
The short-term outlook on PNK might be changing. Shares lost 2.2% and look ready to breakdown under the $30.00 level of support. It was just two days ago that shares were breaking out over the $31.00 and its 100-dma. We're going to stick to our plan and use a trigger to open positions at $31.35. More conservative traders may want to use a trigger above $31.50. If triggered our target is the $34.50-35.00 range. Currently the P&F chart for PNK is still bearish and points to a $19 target.
Picked on June xx at $xx.xx <-- see TRIGGER
Raytheon - RTN - close: 56.91 chg: +0.91 stop: 53.95
RTN displayed relative strength and soared to a new high and on big volume. The move was powered by positive analyst comments on news that RTN had won part of an $11.2 billion U.S. Army contract. Traders might want to think about raising their stop loss toward $55.00. Our target is the $59.75-60.00 range.
Picked on June 03 at $56.17
St. Mary Land - SM - cls: 38.69 chg: -0.23 stop: 35.99
Oil stocks were unable to avoid the market-wide sell-off on Wednesday. SM dipped to $38.28 before traders bought the dip. We remain bullish with shares above $38.00 but if you're looking for a new entry point it might pay off to wait and watch for another dip closer to the $38.00 level. Our target is the $43.50-45.00 range. We would expect some resistance near $40.00 and again near $40.65 but overall the breaking from its trading range and above its 200-dma is very bullish.
Picked on June 04 at $38.51
Trico Marine - TRMA - cls: 41.78 chg: -0.47 stop: 40.45
TRMA, another oil service stock, slipped 1.1% and closed under its simple 10-dma, which is bearish. The larger pattern is still bullish but short-term technicals are struggling with a three-day slow down. Watch for a bounce back above today's high (42.43) as a new entry point. Our target is the $46.50-47.50 range. The P&F chart points to a $58 target.
Picked on June 03 at $42.78
Encore Wire Corp. - WIRE - cls: 29.57 chg: +0.18 stop: 27.95
WIRE displayed relative strength on Wednesday with a 0.6% gain. Traders bought the dip near $28.75 this morning. This looks like a new entry point to go long the stock. An alternative entry would be to look for a new relative high over $30.45. More conservative traders may want to tighten their stops toward $28.50. The Point & Figure chart suggests a $46 price target. We are targeting the $32.50-33.00 range.
Picked on May 27 at $29.26
Short Play Updates
Archer Daniels - ADM - cls: 34.10 chg: -0.39 stop: 36.11
The bounce in ADM appears to be failing. Shares lost 1.1% and closed near its recent lows. We remain bearish. We would consider new positions here although alternative entry points could be a failed rally under $35.00 or a new relative low. Our target is the $30.50-30.00 range but we do expect some support and a bounce near $32.75-33.00. FYI: In the news today ADM announced that it will present at a consumer and food conference on June 12th.
Picked on June 03 at $34.59
MarineMax - HZO - cls: 21.02 chg: -0.18 stop: 21.51
It looks like the bounce in HZO is beginning to roll over. This looks like a new entry point for shorts. More conservative traders may feel more comfortable waiting for a decline under $20.50 or under $20.00 again before initiating positions. Our target is the $17.75-17.50 range. It is VERY important that traders realize HZO has a high amount of short interest. The latest data put short interest at $28% of the 16.8 million-share float. That's a lot of short interest and a small float. Unfortunately, that can be a recipe for a big short squeeze.
Picked on May 29 at $19.95
Staples Inc. - SPLS - cls: 24.45 chg: -0.28 stop: 25.76
The drop under $24.50 today looks like a new entry point for shorts in SPLS. Volume was below average but given the three-day turnaround it looks like the bears have regained control. Our target is the $22.00 level.
Picked on May 27 at $24.40
U S T Inc. - UST - close: 52.27 chg: -1.13 stop: 55.11 *new*
Target achieved. UST lost another 2% on Wednesday. Shares slipped to new nine-month lows and broke down under support near the $52.50 level. Volume behind the move was pretty strong, which is good news for the bears. We are adjusting our stop loss to $55.11. The P&F chart's bearish target has dropped from $47 to $45 with this new decline. We have two targets. Our conservative target is $52.60-52.50. Our more aggressive target is the $50.50-50.00 range. FYI: More aggressive traders might want to give UST more room to maneuver and leave their stop above $56 or its 200-dma.
Picked on May 23 at $54.96
Closed Long Plays
Superior Energy - SPN - cls: 39.04 chg: -0.59 stop: 37.99
We are giving up on SPN and suggesting an early exit. While we are bullish on the oil services sector, shares of SPN have been struggling lately. We'd rather exit now and wait for a new entry point down the road.
Picked on May 13 at $38.42
Closed Short Plays